Court of Appeal for Ontario

Date: 2017-02-08 Docket: C62048 Judges: Simmons, Brown and Roberts JJ.A.

Between

Michael Meehan, Anne Meehan, Michael Meehan, Katarina Meehan, Kathleen Meehan, and Anthony Meehan, by his Litigation Guardian, Anne Meehan

Plaintiffs (Appellants)

and

Donald Good, Donald R. Good A Professional Corporation o/a Donald R. Good & Associates, Ian Stauffer, John Cardill and Tierney Stauffer LLP

Defendants (Respondent)

Counsel

Bryan D. Rumble and Alissa P. Goldberg, for the appellants

Joseph Obagi, for the respondent

Heard

January 19, 2017

On Appeal

On appeal from the order of Justice B. Warkentin of the Superior Court of Justice, dated March 29, 2016, with reasons reported at 2016 ONSC 2110.

Endorsement

[1] The appellants appeal from the dismissal of their claims against their former lawyer, the respondent, John Cardill, following his motion for summary judgment.

[2] The motion judge determined that the appellants retained Mr. Cardill to represent them only with respect to the assessment of the accounts of their former lawyer, Donald Good, who had represented the appellants in the settlement of their tort and accident benefits claims arising out of a motor vehicle accident. She held that they did not retain Mr. Cardill in relation to any possible negligence action that they might have against Mr. Good. She found that Mr. Cardill had advised the appellants on a number of occasions to seek legal advice regarding the negligence issue, Mr. Meehan confirmed that they had received this advice, and the acknowledgement that the appellants signed on September 1, 2009 supports this fact. As a result, and in the absence of expert evidence to support the appellants' position, she found that Mr. Cardill was neither retained nor owed the appellants a duty of care to either pursue or provide them with legal advice regarding the possible negligence action, including the applicable limitation period. Given her conclusions about the issue of the retainer and duty of care, the motion judge determined that it was not necessary to make any findings as to whether Mr. Cardill had, in fact, advised the appellants about the limitation period in relation to a possible negligence action against Mr. Good.

[3] The appellants take no issue on appeal with the motion judge's findings concerning their retainer of Mr. Cardill or his instruction that they seek legal advice elsewhere regarding the negligence issue. However, they submit that the motion judge erred in concluding that there was no genuine issue requiring a trial with respect to the issue of whether Mr. Cardill owed them a duty of care to advise them about the limitation period in relation to a possible negligence action against Mr. Good.

[4] We agree that the motion judge erred in determining that Mr. Cardill had met his burden under Rule 20 to establish that there is no genuine issue requiring a trial on the issue of whether he had a duty of care to advise the appellants about the limitation period.

[5] To determine whether a lawyer owes a duty of care to a client or non-client requires the court to examine all of the surrounding circumstances that define the relationship between the lawyer and the person to whom the duty of care may be owed. Defining the scope of the lawyer's retainer is an essential element of this analysis: Broesky v. Lüst, 2011 ONSC 167, 330 D.L.R. (4th) 259, at para. 69; aff'd, 2012 ONCA 701, 356 D.L.R. (4th) 55. However, it is not the end of the analysis where, as here, it is alleged that the lawyer's duty of care arises out of and extends beyond the retainer. Where such an allegation is made, the court must meticulously examine all of the relevant surrounding circumstances, including but not limited to, the form and nature of the client's instructions and the sophistication of the client, to determine whether a duty is owed beyond the four corners of the retainer: Connerty v. Coles, 2012 ONSC 2787, at paras. 12 to 15; Moon v. Chetti, 2007 CarswellOnt 2312, at para. 14.

[6] The motion judge did not do this. Rather, the motion judge's analysis focussed narrowly on the written retainer between Mr. Cardill and the appellants. As a result, she determined that no duty was owed. However, the motion judge did not explain how she was able to conclude that Mr. Cardill did not owe the appellants a duty to advise about the existence of the applicable limitation period, given the following facts: (i) the change over the course of Mr. Cardill's assessment retainer of his views about the competency of the representation Mr. Good had provided the appellants; (ii) his advice to the appellants that in the assessment proceeding against Mr. Good they should allege he had been negligent; and (iii) his advice to the appellants that they might have a negligence claim against Mr. Good and should consult other counsel on the matter.

[7] In our view, it was necessary for the motion judge to consider those facts, as well as the retainer agreement, and all other relevant surrounding circumstances, in order to determine whether there was a genuine issue requiring a trial. By failing to take into account all material facts, she erred in concluding that there was no genuine issue requiring a trial and dismissing the appellants' action.

[8] Moreover, in the circumstances of this case, it would have been helpful for the motion judge to consider if the record allowed her to determine whether Mr. Cardill had informed the appellants of the limitation period.

[9] In her reasons, the motion judge commented that "[w]hile the evidence supports the likelihood that Cardill informed the plaintiffs of the limitation period, I do not need to find that he did so in reaching my conclusion that he did not owe them a duty of care to advise them further regarding their possible claims in negligence." In Hryniak, at para. 50, the Supreme Court of Canada stated that the standard for fairness in the summary judgment process involves, in part, "whether it gives the judge confidence that she can find the necessary facts…so as to resolve the dispute." In the present case, the motion judge did not state whether the record gave her the confidence to find that Cardill had told the appellants about the applicable limitation period.

[10] As this court observed in Seif v. City of Toronto, 2015 ONCA 321, at para. 49, where, as here, a claim or defence on a summary judgment motion engages a two-part analysis, it is often helpful for the motion judge, having decided the first part, to go on to review the evidence on the second part of the test and make the necessary findings of fact. By so doing, the motion judge provides this court with the benefit of her assessment of the evidence. If the motion judge in the present case was confident that the record would enable her to decide whether Mr. Cardill had told the appellants about the limitation period, such a determination would have proved most valuable on appellate review.

Disposition

[11] Accordingly, we allow the appeal and direct that the action proceed to trial.

[12] In the circumstances, we would set aside the motion judge's award of costs and reserve their disposition to the trial judge.

[13] As agreed, the appellants are entitled to their partial indemnity costs of the appeal in the amount of $13,000, inclusive of all taxes and disbursements.

"Janet Simmons J.A."

"David Brown J.A."

"L.B. Roberts J.A."